Hotel real estate company Host Hotels & Resorts has released an update on its international transactions and share repurchases:
On November 12, the company sold the 273-room Novotel Queenstown for NZ$91.3 million ($59.7 million), including the FF&E reserve, continuing the strategic initiative of selling assets in Asia in order to wind down the Company’s business in the region. The company expects proceeds of the sale to be used to repay the property’s existing NZ$30 million mortgage loan and for general corporate purposes, including funding the stock repurchase program.
As of November 16, the company has bought back $110 million of its common stock since its earnings call on October 29, for an average price of $17.15 per share. This exhausts the first $500 million share repurchase program and begins purchases under the second $500 million share repurchase program, which has remaining capacity of $490 million.
Since the Company’s last earnings release, the European joint venture closed on the refinancing of two mortgage loans. On November 11, the Westin Palace Madrid loan was increased by €5.9 million to €120 million while the initial effective interest rate was reduced by 185 basis points to 2.15 percent.
On November 12, 2015, the Le Meridien Piccadilly loan was increased by £1.6 million to £40 million with an elimination of principal amortization and an initial effective interest rate reduction of 100 basis points to 2.97 percent. In addition to these transactions, the European joint venture is planning to complete a third loan refinancing by the end of November, which is expected to result in further interest savings. In aggregate, these three transactions are expected to save approximately €10 million in annual debt service for the European joint venture and extend the term of the loans until 2020.
“We are making solid progress on our strategic initiatives to create value, as underscored by our latest asset divestitures, financing activity and aggressive stock repurchases,” President and Chief Executive Officer W. Edward Walter said in a statement.